Hardik D Mehta & Co.

Wishing you and your loved ones a very Happy Diwali and a Prosperous New Year😊

Wishing Happy Dhanteras to you and your loved ones😊

HDMCO TaxReg FAQs [500/2024-25] Q. How is liquidation of a partnership interest carried out? Ans. A partner may liquidate a partnership interest in the following three ways: ·        Complete withdrawal – In a complete liquidation, the partner’s basis for the distributed property is the same as the adjusted basis of the partner’s partnership interest, reduced by any monies actually received. The partner recognises gain only to the extent that money received exceeds the partner’s basis in the partnership. The partner recognises loss if the money, unrealised receivables or inventory are the only assets received and if the basis of the assets received is less than the partner’s adjusted basis in the partnership. ·        Sale of partnership interest – The partner has a capital gain or loss when transferring a partnership interest because a partnership interest is a capital asset. The gain or loss is measured by the difference between the amount realised for the sale and the adjusted basis of the partnership interest. ·        Retirement or Death of Partner – Payments to a retiring partner or to the interest successor of a deceased partner in liquidation of his / her entire partnership interest are allocated between payment for an interest in partnership assets and other payments. Payments for interest in partnership assets result in capital gain or loss. 

Happy Dusshera to each one of you from us😊 Bolo Ambe Maa ki Jai🙏 Hardik Mehta CA, ADIT Tanvi Vora Heta Jhaveri Arwa Mahableshwarwala Hetal Mehta Hinal Ghodadra CA Bhoomi Gandhi Zankhana Zaveri CA #team #festive #colour #coordination

HDMCO TaxReg FAQs [499/2024-25] Q. How are deductible partnership losses for the year determined in US? Ans. A partner’s distributive share of the partnership loss is allowed as an adjustment to the basis of the partner’s interest in the partnership at the end of the partnership’s tax year. A partner’s loss in excess of basis will be carried forward indefinitely and remain suspended until the basis is reestablished. 

HDMCO TaxReg FAQs [498/2024-25] Q. What are recourse and nonrecourse liabilities in a US Partnership? Ans. Nonrecourse liabilities - A partnership liability is a non-recourse liability if no partner or related person has an economic risk of loss for that liability. All liabilities to a limited partner are generally nonrecourse liabilities because the limited partner will not be personally liable for that liability with certain exceptions. Recourse liabilities - Conversely, recourse liabilities are those liabilities for which a partner is personally liable. Recourse liabilities may include any loans made directly by a partner to the partnership or those personally guaranteed by a partner.

HDMCO TaxReg FAQs [497/2024-25] Q. What are the consequences of transactions between a partner (not acting in the capacity of a partner) and US Partnership? Ans. If a partner engages in a transaction with a partnership other than in his capacity as a member of such partnership, the transaction of rendering services by the partner to the partnership or sales between a partner and partnership shall be considered as occurring between the partnership and one who is not a partner which shall be subject to the following limitations: ·     Related Party loss shall be disallowed Ø Losses between a controlling partner (owning over 50% of the interest in capital or profits) and his controlled partnership from the sale or exchange of property shall be disallowed ·     Related Party gain shall be treated as ordinary income Ø Gains (arising directly or indirectly) from transaction of sale or exchange of assets between a controlling partner and his controlled partnership or between two controlling partnerships shall be treated as ordinary income if the property is treated as a depreciable asset in the hands of the transferee or the property is not treated as a capital asset in the hands of the transferee. 

HDMCO TaxReg FAQs [496/2024-25] Q. What are the effects of technical termination of a US Partnership? Ans. The effects of technical termination of a US Partnership are as under: ·     A deemed distribution of the assets of the partnership to the remaining partners and purchaser and ·     A subsequent hypothetical recontribution of assets to the new partnership.

On this auspicious 1st day of Navratri, we are happy to share that last month CA Bhoomi Gandhi joined us as Assistant Manager - Tax and Regulatory. She has varied experience in the fields of compliance, audit and tax. We now have a team with combined post qualification experience of 85+ years with an average age of 33 years. We look forward to keep serving our clients with integrity and continue to add value to their businesses. Thanks a lot everyone for your support.😊

HDMCO TaxReg FAQs [495/2024-25] Q. When does a US Partnership terminate? Ans.  A US Partnership terminates on occurrence of either of the following events: a) Cessation of operations b) Fifty percent or more of the total partnership interest in both capital and profits is sold or exchanged within any 12-month period (referred to as a ‘technical termination’) c) Where there are less than two partners in the partnership (i.e. the partnership becomes a sole proprietorship)